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World Bank’s Commitment to Assist Turkey in Achieving Economic Stability


Sep 7, 2023

The World Bank is committed to supporting Türkiye in stabilizing its economy by implementing policies and presenting a new support program. According to Humberto Lopez, the World Bank country director for Türkiye, they anticipate preparing and presenting new operations to the World Bank Group’s Board for a total of $18 billion over the next three years. This amount includes direct lending to the government and support to the private sector. Lopez emphasized that this package, which has a tentative total financing of around $35 billion when considering all financing instruments, is a response to the administration’s commitment and actions taken to restore macroeconomic stability.

Lopez praised Türkiye’s economic performance over the last two decades but noted that persistent inflation, an overvalued exchange rate, and fiscal pressures from the recent earthquakes put this track record at risk. Regarding the support provided by the World Bank after the earthquakes, Lopez mentioned that the International Bank for Reconstruction and Development (IBRD) approved $1.45 billion for two operations to help affected areas rebuild infrastructure, provide healthcare services, reconstruct rural housing, and assist small and medium-sized enterprises (SMEs) in recovering.

In the next three years, the World Bank aims to accompany Türkiye in implementing policies to stabilize the economy. Lopez expressed confidence in the monetary policy tightening by the central bank, the unwinding of financial regulations, and the fiscal revenue measures taken by the Ministry of Finance to curtail the fiscal deficit. He highlighted that this package leverages the World Bank Group’s ability to mobilize resources through its private sector arm. The World Bank will continue its participation in priority areas, particularly climate change, which has become a pressing issue due to record temperatures this summer.

These remarks came after the government’s unveiling of the medium-term economic program, which aims for an average GDP growth of 4.5% from 2024 to 2026. The program also aims to elevate Türkiye to the status of high-income countries with an economic size exceeding $1.3 trillion and address structural factors contributing to high inflation through monetary, fiscal, and income policies.

By Editor

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